Critical Analysis: Diversified Energy (NYSE:DEC) versus Greenfire Resources (NYSE:GFR)

Greenfire Resources (NYSE:GFR) and Diversified Energy (NYSE:DEC) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Institutional & Insider Ownership

88.9% of Greenfire Resources shares are owned by institutional investors. Comparatively, 26.5% of Diversified Energy shares are owned by institutional investors. 20.0% of Greenfire Resources shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Greenfire Resources and Diversified Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Greenfire Resources	$500.71 million	1.05	-$100.50 million	$0.86	8.78
Diversified Energy	$868.26 million	0.88	$758.02 million	N/A	N/A

Diversified Energy has higher revenue and earnings than Greenfire Resources.

Profitability

This table compares Greenfire Resources and Diversified Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Greenfire Resources	9.51%	12.70%	7.35%
Diversified Energy	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Greenfire Resources and Diversified Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Greenfire Resources	0	0	1	0	3.00
Diversified Energy	0	0	2	0	3.00

Greenfire Resources presently has a consensus price target of $10.50, suggesting a potential upside of 39.07%. Diversified Energy has a consensus price target of $19.50, suggesting a potential upside of 22.37%. Given Greenfire Resources’ higher probable upside, equities research analysts clearly believe Greenfire Resources is more favorable than Diversified Energy.

Summary

Greenfire Resources beats Diversified Energy on 7 of the 10 factors compared between the two stocks.

About Greenfire Resources

Greenfire Resources Ltd., together with its subsidiaries, engages in the development, exploration, and operation of oil and gas properties in the Athabasca oil sands region of Alberta. The company operates the Tier-1 oil sands assets located in Western Canada. It utilizes steam-assisted gravity drainage (SAGD) extraction technology, a situ thermal oil recovery process to recover diluted and non- diluted bitumen. The company is headquartered in Calgary, Canada.

About Diversified Energy

Diversified Energy Company PLC operates as an independent owner and operator of producing natural gas and oil wells primarily in the Appalachian Basin of the United States. The company is involved in the production, marketing, and transportation of natural gas, natural gas liquids, crude oil, and condensates. Its assets consist of natural gas wells and gathering systems located in the states of Tennessee, Kentucky, Virginia, West Virginia, Ohio, Pennsylvania, Oklahoma, Texas, and Louisiana. The company was formerly known as Diversified Gas & Oil PLC and changed its name to Diversified Energy Company PLC in May 2021. Diversified Energy Company PLC was founded in 2001 and is headquartered in Birmingham, Alabama.